Markets were already in a strong uptrend. But the day after the election helped turn 2024 into one of the best years on record... The S&P 500 Index is up about 25% this year.
Editor's note: Regular readers know that Chaikin Analytics founder Marc Chaikin still expects a big end to the year for stocks. And he expects even more upside as we move into 2025.
But with this year's rally, some folks might be concerned that stocks have gotten too far ahead of themselves.
However, as our friend Brett Eversole from our corporate affiliate Stansberry Research says, it's not time to panic about that just yet...
Today, we're sharing an essay from Brett that just published yesterday in his free DailyWealth e-letter. In it, he explains how one indicator on investor optimism still points to more upside ahead...
Stock Bullishness Is Heating Up
By Brett Eversole, editor, Stansberry Research
Markets were already in a strong uptrend. But the day after the election helped turn 2024 into one of the best years on record...
The S&P 500 Index is up about 25% this year. That puts us on pace for one of the 10 best years since 1950.
The postelection rally has been impressive. But there's one catch... It's in danger of getting ahead of itself.
Futures traders recently reached the most bullish level they've been since early 2022. And if that bullish trend continues, it could signal tough times ahead for the broad market.
The good news is that we haven't hit euphoria yet. And that means stocks could still move higher in the months ahead.
He predicted the 1998 emerging market crisis, the 2007 financial crisis, the bankruptcy of General Motors, and the recent wave of banking collapses. Now Porter Stansberry is back, sharing a new warning that he considers to be one of the most important of his 25-year career. It involves Trump's recent victory... and why most people have no idea it could soon be a nightmare for the American financial system. See Porter's new postelection warning here.
With so many strange events happening across the economy (the longest bear market for bonds since the Civil War... unprecedented bank closures... and soaring prices), it's no wonder the richest investors are loading up on gold. But what you might not realize is there's a much better way to profit from rising gold prices – WITHOUT ever touching an ETF, mining stock, or even bullion. Click here for new GOLD recommendation.
Sentiment always follows price. The longer a bull market goes on, the more excited investors get to own stocks.
It's not plain old excitement you have to worry about, though... It's euphoria. That's when high sentiment becomes a warning sign of potential pain on the horizon.
Unfortunately, we're getting near that stage. That's according to the Commitment of Traders ("COT") report on S&P 500 E-Mini futures...
The COT report shows what futures traders are doing with their money. And the E-Mini contracts on the S&P 500 are simply smaller contracts. They're where most of the action is in S&P 500 futures.
Futures traders have a bad habit of piling into the same bet at the worst times. That makes the COT report a useful contrarian indicator. And recently, it showed that these folks were the most bullish on stocks they'd been in years. Take a look...
The COT reading for stocks was at a low last year. It has exploded higher since then.
Again, that's no real surprise. Stocks have been on an incredible run over the past couple of years. The S&P 500 is up more than 40% since the reading bottomed last year.
Now, though, the market is getting frothy. The COT spiked after the election, with traders making the most bullish bets we'd seen since April 2022... when the last bear market was taking hold.
The good news is, we're still below those early 2022 highs. We're also still below the highs of early 2018, which became another painful year for investors. And after the election spike, the COT fell dramatically the week after. So this bullishness might not be moving to euphoria just yet.
Also, when it comes to sentiment extremes, lots of warning signs tend to flash together when a major decline is near. And most other sentiment indicators today are either in no-man's-land or just getting bullish.
We're not getting euphoric readings across the board. And that's a good thing.
This recent COT measure is one of the most bullish readings we're seeing today... So we need to keep a close eye on this signal. And we need to watch other sentiment indicators to see if they begin to match the COT for bullishness.
If investors move from bullish to euphoric, it'll be time to worry about the markets. Fortunately, we're not there yet. And that means we want to keep owning stocks now.
Good investing,
Brett Eversole Editor's note: For regular insights like this from Brett and his Stansberry colleagues, you can sign up to receive DailyWealth. Just like the Chaikin PowerFeed, it publishes each weekday morning that the markets are open. And it's free to read.
To learn more about DailyWealth and find out how to sign up for it, click here.
Market View
Major Indexes and Notable Sectors
# Hld: Bullish Neutral Bearish
Dow 30
+1.07%
9
14
7
S&P 500
+0.54%
125
290
87
Nasdaq
+0.36%
29
56
16
Small Caps
+1.55%
535
1007
368
Bonds
-0.1%
Utilities
+1.74%
6
25
0
— According to the Chaikin Power Bar, Small Cap stocks and Large Cap stocks remain somewhat Bullish. Major indexes are all bullish.
* * * *
Sector Tracker
Sector movement over the last 5 days
Utilities
+4.88%
Energy
+2.37%
Real Estate
+1.93%
Materials
+1.8%
Financial
+1.07%
Industrials
+0.59%
Staples
+0.52%
Communication
0.0%
Discretionary
-0.13%
Health Care
-0.33%
Information Technology
-0.46%
* * * *
Top Movers
Gainers
SMCI
+15.12%
AMTM
+10.49%
DE
+8.05%
VST
+7.75%
CEG
+6.97%
Losers
GOOGL
-4.74%
TDG
-4.1%
GEHC
-3.42%
AMZN
-2.22%
MKTX
-1.93%
* * * *
Earnings Report
Reporting Today
Rating
Before Open
After Close
CRH
DE, AZEK
CAVA
No earnings reporting today.
Earnings Surprises
DE Deere & Company
Q4
$4.55
Beat by $0.62
INTU Intuit Inc.
Q1
$2.50
Beat by $0.14
ROST Ross Stores, Inc.
Q3
$1.48
Beat by $0.08
NTAP NetApp, Inc.
Q2
$1.87
Beat by $0.09
CPRT Copart, Inc.
Q1
$0.37
Met estimate
* * * *
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